Narayana Health expands into UK with Practice Plus Group acquisition

Narayana Hrudayalaya Limited is acquiring 100% of UK-based Practice Plus Group Hospitals Limited (PPG), the fifth largest private healthcare network in the UK. This acquisition, implying a 9.2x FY25E EV/EBITDA multiple, is set to close within days, with no pre-closing regulatory approvals required. PPG, owned by Bridgepoint, operates with three divisions including Secondary Care and Integrated Urgent Care, and focuses on secondary care with committed NHS contracts.

The strategic move provides Narayana Health with an entry into the mature UK market, which is experiencing a shift towards day care procedures and increased private pay. PPG's asset-light model, geared towards day care procedures, is seen as an excellent platform for growth, with a target of 12% year-over-year growth over the last five years. The acquisition will be financed with approximately £150 million through long-term debt over seven years.

In FY24, PPG reported revenue of £229 million, projected to reach £250 million in FY25E. The company's five-year growth shows a 12% CAGR in revenue and 12.5% CAGR in Centre EBITDA. The transaction includes a six-month transition services agreement to ensure continuity and retention of all secondary care management and key corporate employees.